HIGHLAND — A state appeals court ruled Tuesday that the Town of Highland erred in adding to its taxable properties list Eldred land used by a Queens-based Catholic organization as a retreat for artists, parishioners and students.

Leonard Sparks

HIGHLAND — A state appeals court ruled Tuesday that the Town of Highland erred in adding to its taxable properties list Eldred land used by a Queens-based Catholic organization as a retreat for artists, parishioners and students.

A five-judge panel of the Appellate Division, Third Department, voted 3-2 to uphold a Supreme Court ruling that the Eternal Flame of Hope Ministries Inc.'s 46-acre parcel is exempt from property, school and other taxes that currently total about $15,000.

"This Court has held that property used as 'a spiritual retreat' does, in fact, qualify for the exemption despite the fact that a 'retreat center is not a church in the narrow sense,'" Judge Thomas Mercure wrote in his majority opinion.

The dispute dates to 2002, when Eternal Flame's president, the Rev. Richard Bretone, received a building permit to construct an art studio on the property, which he then owned.

After the studio was completed in December 2006, Bretone transferred the property to Eternal Flame. The organization then petitioned the town in 2007 for a tax exemption. The town's then-assessor, Lorry King, and Highland's Board of Assessment Review both decided a retreat did not qualify. Eternal Flame then challenged that decision in Supreme Court.

Eternal Flame's lawyer did not respond to a request for comment. But Monticello attorney Michael Davidoff, who argued the case for Highland, said the majority erred in ignoring the dissenting opinion, written by Judge Karen Peters.

Peters' dissent said Eternal Flame is prohibited from receiving an exemption because the property's use as a retreat violates Highland's zoning code, which places the property in a residential district.

"This started out as building an art studio," said Davidoff. "Then all of the sudden it goes from an art studio to a retreat."

Davidoff pointed to the one-vote majority as evidence that the court had difficulty deciding the case. He suggested that Highland should appeal the decision.

"This issue is important to the town as well as to the county," he said. "There are a number of properties that are tax- exempt, and there's a strong felling that each of them should be looked at."